Net Profit Recorded a Significant Increase to RMB1.7 Billion
HONG KONG, Oct. 28 /Xinhua-PRNewswire-FirstCall/ -- Sinopec Shanghai Petrochemical Company Limited ("Shanghai Petrochemical" or the "Company") (HKEx: 338; SSE: 600688; NYSE: SHI) announced today the unaudited operating results of the Company and its subsidiaries (the "Group") for the nine-month period ended September 30, 2007 (the "Period"). Under the PRC Accounting Standards for Business Enterprises, the Group's operating income for the Period amounted to RMB39,558,923,000, while its operating profit for the Period was RMB2,287,888,000 and net profit attributable to equity shareholders of the Company for the Period was RMB1,657,175,000. (For the nine-month period ended 30 September 2006: the Company suffered a net loss of RMB48,638,000).
Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, "In the first nine months of 2007, the Group recorded a significant increase in its operating profit, mainly due to a decrease in the cost of crude oil processed and a rise in the prices of its major products in the first half as compared to the corresponding period of the previous year. The increased investment income from Shanghai Secco Petrochemical Company Limited and the gain from disposal of available-for-sale financial assets in the stock market have also contributed substantial profits to the Company. Also, the Group implemented an overall cost leadership strategy as its main course of action while focusing on improving economic efficiency and striving to reduce costs and expenses. As a result, the net profit attributable to shareholders of the Company increased by over RMB1.7 billion as compared to the corresponding period last year.
Looking ahead, Mr. Rong Guangdao said, "Although the Group recorded solid earnings from January to September this year, international crude oil prices had been setting new highs in the third quarter and it is anticipated that crude oil prices will hover at higher levels. Therefore, the Company's operational situation is challenging. In light of such factor, the Group will accelerate the development of the structural adjustment project and push forward technological advancement programs, thereby striving for an enhancement of the Group's competitiveness. To further improve the Company's operating efficiency, we will continuously enhance internal management, cost and expenses reduction and optimization."
Shanghai Petrochemical is one of the largest petrochemical companies in the PRC and was one of the first Chinese companies to effect a global securities offering. Located in Jinshan District in the southwest of Shanghai, it is a highly integrated petrochemical complex which processes crude oil into a broad range of products in synthetic fibres, resins and plastics, intermediate petrochemicals and refined oil products.
This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward- looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the PRC economy may not grow at the same rate in future periods as it has in the last several years, or at all, including as a result of the PRC government's macro-economic control measures to curb over-heating of the economy; uncertainty as to global economic growth in future periods; the risk that prices of the Company's raw materials, particularly crude oil, will continue to increase; the risk that the Company may not be able to raise its product prices (particularly refined oil products) accordingly which would adversely affect the Company's profitability; the risk that new marketing and sales strategies may not be effective; the risk that fluctuations in demand for the Company's products may cause the Company to either over-invest or under-invest in production capacity in one or more of its four major product categories; the risk that investments in new technologies and development cycles may not produce the benefits anticipated by management; the risk that the trading price of the Company's shares may decrease for a variety of reasons, some of which may be beyond the control of management; competition in the Company's existing and potential markets; and other risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update this forward-looking information, except as required under applicable law.
Encl: Consolidated Income Statement (Unaudited) Please refer to the link below: http://xprnnews.xfn.info/SHPetroChem/20071026/HK077357.pdf For further information, please contact: Ms. Christy Lai / Ms. Janice Lee Rikes Communications Limited Tel: +852-2520-2201 Fax: +852-2520-2241
